Crypto Wrap: Expect High Volatility as Inflation Remains a Concern, Experts Say
The crypto market has remained stable for the past 7 days. Total market capitalization (m-cap) slipped slightly from $1.04 trillion on August 19 to $1.03 trillion on Friday. Bitcoin, m-cap’s largest cryptocurrency, was down nearly 2% from August 19 and was trading at $21,446, according to data from coinmarketcap.com.
Ethereum, the second-largest cryptocurrency, fell almost 5% over the same period and traded at $1,661. Some other coins like XRP and Shibu, however, have made gains in the last 7 days.
“Ripple (XRP) and Shiba Inu (SHIB) highlighted an increase in whale transactions to a three-month high. resurgence of new holders amid spike in social media mentions,” the CoinDCX research team said. Trade standard.
Read also: Explained: Ethereum is set for a mega “merger” to become more energy efficient
The volatility in the crypto market comes at a time when stock markets were showing high volatility globally. The Nasdaq fell 2.5% last week. Japan’s Nikkei index was more than 1% in the red. Sensex was 0.4% lower than it was at the start of the week, according to market data.
Experts attributed this to high inflation fueled by rising prices.
“The correlation between equities and debt invariably rises during periods when growth is driven by inflation-fueled asset prices and not by real growth. This is why equity and debt markets suffer blows at the same time”, Vivek Iyer, partner, says Grant Thornton Bharat.
“Investors want to hold more money now rather than lose more value against their core holdings. Therefore, we don’t see redeployment into crypto as a possibility. Additionally, existing investors who hold crypto would like to either stay seated or get out,” Iyer added.
Inflation remained above the thresholds set by central banks around the world. In the United States, Fed Chairman Jerome Powell has repeatedly said that they will continue to raise benchmark interest rates to get them under control. Inflation in the UK has crossed the 10% mark after more than 40 years.
What to expect in the next few days?
“BTC has consistently attempted to hold its price above the $21,000 support level. If buyers can get back into the market, we could see BTC surge to $22,000 soon. The second largest cryptocurrency, Ethereum , remains bullish as the price is above the key support level at $1655. ETH has not yet built up enough strength to rise or fall. However, $1700 now plays a vital role for traders. bulls,” said Edul Patel, CEO and co-founder of global crypto investment platform Mudrex.
Experts, however, reiterated that the crypto market will continue to experience high volatility in the coming days.
“We expect the crypto space to at least demonstrate limited volatility between 5-10%,” Iyer said.
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